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tv   Key Capitol Hill Hearings  CSPAN  January 15, 2015 1:00am-3:01am EST

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screeria -- nigeria. -te.
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and the house ways and means committee looks at the state of the u.s. economy. last month the white house announced anjfyt agreement with cuba that includes steps to ease a trade embargo against the caribbean nation. experts on international trade and advocates for increased commercial ties to cuba discuss the next steps for imageak&
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u.s./cuban relations. this discussion hosted by the washington international trade association is an hour and a half. >> good morning, everybody. thank you for braving the weather today.gkevr(t&háhp &hc% we were a little worried that the federal government might have a delay or a closure because, as you all know, when there's a half an inch of snow in washington anything can happen, can have a disaster. john came in from buffalo this morning where when they have half an inch of snow, that's sort of like spring right? it's like pollen on our cars here. i'm kevin levinson, the executive director ofo we are delighted to have you all here. before i turn it over to our moderator ambassador, john, i would like to thank team diego, inez. we have a big announcement that
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we made yesterday which was the launch of a new blog called america's trade policy.com. it was actually created in 2013 by bill chryst at the woodrow wilson center for scholars. it's a new content platform for wida. we welcome input from membersccñ and members of the trade community. there will be information on it in the back, outside the room when you leave today. in fact, john was going to mention this in his remarks. we're really pleased that a book by the peterson institute on economic normalization with cuba we're going to be publishing the first chapter of that on our blog. john will talk about that but you'll be able to find that on our website. on thursday, january 29th we're hosting a panel feature the reverend david beckman of bread
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for the world and he's talking about the world hunger report, titled when women flourish we can end hunger. rich leach from the world food program, alease young and claude fontheim. on friday february 13th we have our annual trade councils program with the four councils from the ways and means and finance committees. now to today's panel, i'll leave it to john to introduce our panelists. john is a long-time wita friend, one-time board member, now with the d.c. office of covington and burling and co-chair of trade practice was deputy and u.s. general counsel at ustr. he worked at the department of defense in the '90s with then defense secretary bill cohen
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with was senator cohen senator collins and senator frist. john, thanks for doing this, thanks to our panelists. take it away. >> thank you for being here. thank you for wita for putting this on. i want to open with a few remarks. the title today at thawing of u.s./cuba relations. i wonder how many in the audience saw thawing and thought it would be a good place to duck into on a morning like this. whatever prompts you to join us, we're glad you're here. the turnout for this is consistent with other ú r cuba-related events. not only since the president's announcement but over the years cuba has just captures the imagination. i remember back when we were trying to get support for the u.s. colombia free trade agreement which i know enjoys
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support from folks on this panel and folks in thev y room colombia represented 8 times the market opportunities. but generating interest was always limited compared to cuba which seems to campturebixe the imagination. today's focus is not on the politics of the u.s./cuba relations. but i think it's fair to say it's an economic issue but also an emotional issue. there are families who had their property confiscated, whose families were upended, who have strong views about relations with the current government in cuba and for understandable reasons. today we're going to focus on the president's announcement and what some of the perspectives are from the legal and business community. i want to mention as ken did the
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peterson institute in the category of great timing. about six months ago they came out with a study called economic normalization with cuba, a road map for u.s. policy makers. similar to the focus of today's panel, it's not about the embargo, is it good, is it bad. it was just, frankly a workman-like approach as you would expect from its authors, gary huffbauer and barbara cutchwar. these are the things that policy makers need to think about when the tech tonicic plates move. it's on wita's,zjçc br website and its new website and obviously hp r(t&háhp &hc% through the peterson institute. i think the first chapter of that book is available online
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and there may be even some copies outside on the table. but it's a very thoughtful piece. what i appreciated about it frankly, was in trade debates the camps usually fall quickly into two the art ent free traders and the ardent protectionists. consistent with the thoughtfulness of the peterson institute work product, this argues that, look we should be -- i think the implicit message is opening market with another country is a good thing, but we should be approach it with some caution and we should approach it in a measured way and not in a breathless way. and the analogy that gary and barbara use in it is russia. with all due respect, that is an economy that is not as open astv1op i think a lot of us hoped it would be at this point in time.
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when we talk about opening markets with other countries, we sort of -- those of us who are in the free trade camp like to think, these are markets that are really going to be open to us and not in name only. you have an ol gark in russia that the study references and discusses as something to avoid when we talk about normalizing and opening relations with cuba so that we don't lose the leverage of the u.s. market without having some strategy for making sure the cubançkf
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obviously the cuban people themselves. economic freedom is ultimately going to be the source of their long-term welfare. so with that let me turn it over to our t5 today. i'm going to introduce them in the order that we're seated up here, but then i'm going to mix it up a little bit as far as the order of our to my immediate left is defry vorwerk. she has been in her position with gargail since 2004. before that was a colleague of mine where she handled agricultural issues. she's also the president of the u.s. agriculture coalition on cuba and is very active in this space. to her left is jay colvin, he's the vice-president global trade
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issues at the national foreign trade council. jake, in addition to being very active in many trade issues on behalf of american businesses and others has been particularly active in cuba and published a paper entitled the case for a new cuba policy, a road map for the obama administration to engage cuba. to his left is robert hughes. robert is a lawyer here in washington and has represented many clients on matters regarding cuba and has a long history with this issue and has testified before congress and has been a very active participant in the debates, legal and policy-wise with regard to cuba. and to his left is john cavolich. he is senior policy advisor the u.s. trade council formerly
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served as president and in addition to making it in from buffalo today, has been very active for probably three decades now on cuba policy matters. we welcome him and the others of the panel today. so we will each -- each k of the panelists will provide remarks for five to seven minutes and then we'll have some time for questions. we're going to start with robert who is going to kind of do a scene setter for us as to the president's announcement on december 17th. i know folks in this room are savvy enough to know that the president did not announce the end of the embargo. most people i think picked up the newspapers on december 18th and thought the embargo was over and when could they get on an airplane, but it's a more complicated matter that robert will lay utout for us. robert, over to you. >> thank you john and wita for
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putting this event on this morning. and thank you for coming. the title of this event is the thawing of u.s./cuba relations, what does it really mean for trade. the short answer;v]ñ
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worth of goods to come to the u.s., including $100 of alcohol or tobacco. he can do that notwithstanding the cuban asset control regulations that prohibit imports of cuban origin products. so his executive branch authority has already been and is in the course of being drafted into a final rule, has allowed imports from cuba. exports to cuba, he's allowed at least five different areas of exports. one are building materials that can be used in residential construction consumer goods that aren't defined yet or identified that can be used by cuban entrepreneurs. i think that means basically goods that could be sold in cuba. that's essentially limitless. john could remind me, he's kept a list over the years. i think they're close to 10,000 u.s. trademarks currently
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registered in cuba. goods can now be sold in cuba. he also allowed for farm equipment to be sold to small farms in cuba. so the export of equipment. at the same time he licensed certain telecommunications sales to cuba and finally financial services in terms of direct banking and the use of credit cards. my essential point is that the announcement of december 17th summarizes and confirms what i and people like jay colvin at the national foreign trade council has been arguing for years. presidential authority in relation to trade with cuba is essentially unfeterred. you'll hear comments that helms burton codified the embargo and therefore limited presidential discretion in this area. it's not true.
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when the embargo was codified, it codified in place the presidential discretion and authority that was exercised on december 17q! there may be some copies at the this. there's an article in the fall edition of early thatxk8r) j out some of the legal basis for what i've just said. we want to leave as much time as possible for questions so i'll end by saying from the small beach head that i've described residential sales of materials could be used in residential renovation and construction, take that as a model for u.s. business. at the moment there are agricultural sales to cuba as one of the few areas in which commerce one way is allowed.
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those agricultural commodities have to be sold -- cuba insists that they be purchased by state instrumentality. i suspect that's going to be true with u.s. exports to cuba initially, whether it's building materials or farm equipment or consumer goods. however, i can see over time that's going to expand, so u.s. businesses thinking about trade with cuba should be thinking early on about things like warehouse and distribution facilities in cuba. cuba's recently renovated its national port on the north coast. think about the opportunities of expanding the small opening into corporate access to cuba. i believe that president obama means cuba to be a legacy issue. the secretary of commerce will be going tentatively in april.
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i don't think she's going to unless there's a larger initiative under way at this point. so i think president obama wants a legacy issue in the foreign policy area. this is one of the few that remains in the short time he has left, so i expect to see a substantial expansion and broadening of this small opening to give u.s. corporate sector its first real opportunities in cuba since the embargo was imposed 55 years ago. thanks. >> thank you, robert. next we're going to go to devry. >> it's great to see you all here this morning. as i understand, we had to expand the room because of the interest in the topic. as the ambassador stated, there's often great interest when we talk about cuba in washington. i truly believe that your presence here today and the size
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of the group not only represents the policy imperative that we have in front of us but the moral imperative that we have in front of us as not only from our standpoint in agriculture industry but as americans in general. for those of you that don't know last week the u.s. agriculture community broadly launched publicly at the national press club the u.s. acc which is the u.s. agriculture coalition fh+ tk cuba. that group is growing. we're continuing to add members since our launch. but that group basically makes up the broad cross-section of the u.s. agricultural and food community with the express purpose of coming together to end the embargo. i'm currently serving as the chair of that organization and before i go any further, i'd like toé)c
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#poundcubaalttrade. i was speaking with jake a few mince before and he said wow, you pulled that together in two days. actually, we've been working for about eight months to get ourselves organized around a charter. i'll go through exactly what it is that we've committed to as a group. but why eight months ago? as an outgrowth of one of the trips that i took to cuba last march basically on a sales call, we've been able to sell food into cuba through humanitarian channels since the year 2000. our company was there since 2002. i recognized how difficult it was for our business to actually sell food to cuba. fast forward into may. our cfo was -- and i traveled with the delegation, was part of a historical delegation of the u.s. chamber of commerce to cuba, led by tom donohue, to assess the business climate.
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the cuban government has implemented a new foreign investment law that folks may or may not know about. at the same time, they have put laws in place to begin allowing for people individual people, to become part of the private sector. the cuban government is transitioning many individuals off of the government payroll and recognizing the need to empower private enterprise. while we were there we met with most branches of the cuban government. we were able to visit 16[ q%y 9 we were able to meet with entrepreneurs, and we were also able as the first americans to visit the port of mariale that has been funded by the brazilians for $800 million. we vi=0qw6 a canadian investment in energy and we feel like we got a very broad-based understanding of what's going on in the cuban economy. point blank, the rest of the world is there. they're beginning to be there more significantly, and the american business community is not there.
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so what is the u.s. acc and what are we planning to do to shift the narrative here in washington and actually drive change? first of all we've come together with the express purpose to liberalize the trade between the two economies and the primary purpose of ending the embargo. i do understand that there have been discussions around how far the president can go, and we certainly welcomed the announcement on december 17th but in our conversations with the administration, we know full well that even on the financing side, the executive order will only take us so far. quite frankly, we are strung by our ability to use u.s. financing to sell food to cuba. so we very much see the end of the embargo as a necessary step in allowing us to have meaningful trade. we're reenergized to establish cuba as a market for u.s. agricultural products andm.x
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currently there are 11 million citizens there and it's a natural market. it's 90 miles off our coast. certainly none of us in business in this room could say that cuba is at the top of the list in terms of markets for their company, but what they can say is it makes absolutely no sense that if we have a partner very close to our coast where it's a natural market, that we should be denied an opportunity to trade there. as our coalition we have four goals. we're going to advance a constructive dialogue here in washington on u.s./cuba relations. we're going to actively engage to end the r9 kvr t)jt embargo. we're going to work with key stakeholders to drivexa÷ momentum towards historical change and our hope is in 2015. we are going to take public platforms to explain the moral imperative of trade liberalization with cuba. i'll give you a few statistics because even though we've been able to sell food into cuba since 2002 and we saw an initial
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uptick as u.s. agricultural community through 2008, u.s. agricultural sales have declined significantly since then. where it reached about $700 million in sales in 2008, we're around $450 million in sales now. u.s. rice, cuba used to be its largest export market. u.s. rice is no longer exporting to cuba. let me restate that. u.s. rice indicates that cuba was its largest export market. that may come as a surprise. soy, the soy industry they see cuban use a lot of soy oil. it's also a necessary input into animal feed. 99% of the cooking done by cubans is using soy oil. while in 2002 2012, the soy growers saw that they had about a 70% market share.
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that declined to 40% in one year. wheat is making zero sales into cuba at the moment. they're estimating that to be about a $250 million loss year on year. and they believe that the cubans are paying three times the price for transporting agricultural products to cuba. so this is about the affordability of food in the cuban market. the cubans are spending too much money on the financing of food and transport of food. bottom line, they're spending too much money on food. so at the end of the day, what we have seen is the brazilians, the vietnamese, the europeans and argentinians are all taking our market and it's quite a necessary event for them to do that. again, while we think it's a modest market, it's important. this to us, i would like to express, is not about a single trade flow of u.s. commodities going south. why do we believe that there
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needs to be an absoluti normalization of relations? because this is about the broader american business community being able to take a goods, services and capital we believe that through the broader development economic development of the cuban market we all gain. not only that, the 11 million citizens of cuba gain. those are 11 million citizens wholh*qq' under a policy experiment for 54 55 years. it's a failed policy experiment. what i can say is, if you're a farmer and you plant a seed the same way in year one and you try it again the same way in year two, and then after 55 years you're still doing the same thing, but that seed is not germ nated and popped up and taken advantage ofzbafp photo synthesis and grown, wouldn't you think about doing something differently? that's what is upon us is
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changing the status quo. it's easy to be on the side of status quo because there is a negative narrative out there. our coalition last week had azs broad subset of bipartisan support. we had senator jerry moran and sam farr from california rodney davis, republican from illinois, kevin kramer, republican from north dakota the secretary of agriculture which i believe is the first cabinet member since the embargo to stand up with a group that's ending the embargo was there. the governor from missouri agreed to work on a bipartisan basis toé from republican and democrat governors across the nation. so it's a bipartisan issue. one thing we need to remember is that cuba is a w.t.o. membervçs which means they'recl offering
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benefits to the other w.t áeihm members and we're just simply not in the game. so it will require normalization of relations. again, we believe that it's not only the majority of congress on our side but we also know that the majority of the american people are on our side. so at this point what we can say is that we certainly recognize the history, the difficulties and the emotion and pain of the u.s. agricultural coalition for cuba is that we can collectively own the future. that's what we can own. i would submit to the business groups that are in the room today that often get steered down the course of moderation on this policy or, gee, it's too tricky to talk about, actually join us, stand up recognize that the policy imperatives here, we've got a lot of things on our plate from trans-pacific partnership to tpa, to t. tip,
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but we can't wait one more day. why wait for another president. the answer is in front of us now. we welcome conversation with the u.s. coalition on cuba and i'm open for questions. thank you. >> great thank you. jake, we're going to turn to you next. >> sure. thanks john, and thanks diego and ken. for those of you who don't know, we're a business trade association in washington d.c. that promotes international trade. we've run a coalition called usa engage which opposes unilateral sanctions and promotes the ideas of u.s. engagement in the world. we are a good compliment on what devry is doing. congratulations because you've done a lot in a short period of time and it's been really impressive. she's done a good job of laying out the case for normalization. so i would be remiss if i didn't say we support that, too.
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rather than saying the same thing that she said about why normalization is good and important and should happen now i thought i would focus on two other things. the first is the importance of the announcement that's been made by president obama to the business community and also some of the longer term challenges aside from the sanctions to re-establishing trade investment ties between the united states and cuba. first on the announcement, it's just generally really good news. this is a fundamental change in u.s./cuba policy. it wasn't half measures or couched in rhetoric against the castros. what it does is flips the debate upside down. so this is the first time sinced]yñ 2000 when congress was passing the trade sanctions reform act where we have a policy of engagement that opponents the few of them that are left, have to respond to. the other thing that it does is it sends a signal to the business community that it's okay to express interest and
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start to explore cuba. i think there will be a lot of curiosity from the business community. it's been off limits for so long so you'll see a lot of interest in exploring the situation on the ground. i think what the administration's announcement will do -- the president'sya announcement will do, will enable that curiosity and enable businesses to start exploring cuba. i wanted to go through a couple of the provisions that have been announced so far that i think are of particular importance to the business community.ta)$v the first is establishing licenses for travel. the fact that treasury will generally license travel will significantly expand the ability of americans to go to cuba and for businesses and entrepreneurs from the united states to start to get a feel for the cuban market. the second thing is enabling direct banking and credit card processing relationships. this is good for americans who want to go on the ground -- who want to go to cuba and travel and use their creditn n([z card, but it's also good for businesses who will have an easier time receiving payment for goods easier to protect your property
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and trademarks. the third provision that's generally important for u.s. businesses is permitting u.s. owned and controlled entitys to provide services and engage in financial transactions with cubans located in third countries. this has been a gigantic point particularly for u.s. banks who would have to deny accounts to cuban nationals living in a country like spain. so i think there's also those provisions seem clear to me that they will be enact in the coming weeks and rules that treasury and commerce will put out, but i think there are other areas of the president's announcement in the white house fact sheet where we need to wait to see what's going to happen. there's a lack of clarity. so the first is what will the extend of enabling services be? travel service providing will be allowed to provide services to u.s. travelers going to cuba, but willy$nf orbits bekil able to sell travel online will the u.s. be
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able to deliver packages to support entrepreneurs in cuba? i don't think that's clear yet. there are some references that are a bit vague. one is exploring additional options for promoting the growth of entrepreneurship in the private sector in cuba. that may or may not come in an initial round of regulations. my read of the president's authority is similar to bob's which is that he can use his licensing authority broadly. so one thing that i've been suggesting is that he could license imports into the united states of products made by cuban entrepreneurs. so you could license ebay to engage cubans on their platforms to sell things into the united states. i'm not sure that's going to be part of the initial regulations but it does seem like the sort of thing that would be consistent with the president's announcement. so that's the short term. but i think the longer term, the enthusiasm and the curiosity that exists right now is going to be tempered both by the state of u.s. policy and the fact that
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sanctions still exist and are out there, but also by the reality on the ground in cuba. we talked a little about the limiting factors that sanctions will president until there's a full normalization of relations, but i think the long-term opportunity depends on more than an end to sanctions. shutting off sanctions is not like shutting off a spigot. they'll be affected by first and foremost, economicx!pyv development in cuba. to the extent that cuba can purchase things from abroad and support investments on the ground in cuba, a trade investment will expand. but the fact thing is it will rely on the attitudes and the pob-ls of the cuban government. if you're looking at trading with cuba, you're going to care about customs facilities, tarrif tarrifs tarrifs, transparency, protecting individual property
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rights. cuba doesn't always score high on those metrics in part because they're ambivalent about their relationship with the global economy. having been there a couple times, my perception is they want a trickle and not a flood of foreign trade and they're very wary of the united states. i think that's changing and there's a vibrancy in cuba. there are -- castro is trying to encourage entrepreneurship and is starting to engage internationally more, so we'll see where that goes. but i do think these will be limiting factors even when sanctions go ai ia away. i'll stop there. >> john, can you round us out here? >> i'll try not to be redundant. i apologize for my voice, a little laryngitis. i think many people listened and saw and read what the president announced and heard, saw and
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read what they jbçwanted. they didn't necessarily listen to what he said or how he said it, nor did they listen to the cuban response. look at the optics. president obama wore a dark suit stood at a podium, spoke for 15 minutes what he wanted to do with the cuban people. president castro spoke for about three minutes sitting at a table wearing a military uniform. they still feel that they're under attack, and many of them still feel they're at war with us. cuba is only going to permit what it believes it can control. it's not a criticism, just a fact. one of what the challenges are going to be is dismissing the belief that somehow cuba is
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dubai with 11 million people that has so much money that it's flowing and they're waiting for the currents to push it north. cuba develops its trade relationships not solely based on cost but also on politics. again, not a criticism. countries do that throughout the world. i'll give you a little history. from 1980 to 1992 foreign subsidiaries of u.s. companies including cargo engagedn5 in trade with cuba, about $5 billion worth. 1992 cuban democracy act stops that subsidiary trade but reauthorized healthcare products. 1996, todd allows for private settlements with u.s. companies,
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reauthorized food and ag sales. there have been very little healthcare product sales to cuba since 1992. why? in large measure it's because cuba would rather have a political issue than it would healthcare products for its people. in addition, products are expensive in the united states and they can get products from other places and they can get it with financing. some years ago council worked out an agreement with the catholic church. the agreement was that they would be able to provide for the third party verification, part of the cda says that healthcare products can't be used for torture or reexport, used in tourism, et cetera. they said they would be willing to do that. so from the business community standpoint, we thought that was a slam dunk. it took away an issue that had been v÷ disrupting exports. at the same time, it was able to
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solve a problem. cuban foreign ministry went mental. they said basically you've just destroyed our ability to use that as an issue. not saying they always want to do that, but it's a component and it needs to be thought of here. from december of 2001 through november of last year u.s. exporters, food and:=;ag, it's a total of about $5 billion just a shade under $5 billion and that's in cash, and the payment terms have been cash in advance as they required. and the cubans bought after tisra was signed into law. they didn't buy anything for a year. in the u.s. business community and ag groups and others basically said we worked all this time and now you're saying you won't buy anything because you didn't get financing. well, we'll go focus on some other countries. then in december of 2001 they
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came back because of a hurricane and said we're going to make a one off purchase, just once just to replenish products that we need that were damaged in the hurricane, wood and that. they didn't buy wood for a couple years, but they began the process. over that time there have been changes. the bush administration actually relaxed the payment terms. then later in its administration, because of abuse is s with travel to cuba, they went back and reversed it. now president obama is reversing it again. my point is that when folks want to focus on everything that we want to do down there, cuba also has to make some changes. cuba hasn't had to make a lot of changes because there have been countries that have been willing to support it. currently venezuela. so i would argue that right now
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the u.s. relationship with cuba is far less meaningful to cuba than is cuba's relationship with venezuela. venezuela has issues and they've already decreased slightly, their subsidized oil exports to cuba. that's going to create an impetus for cuba to make some changes that it doesn't want to make. it could result in a second what we call special period in cuba which took place after the ussr changed its relationship. so there's a lot going on that you need to review. we've heard some discussions about that. cuba didn't stop buying from the united states because it couldn't get financing in tisra. as a matter of fact, u.s. companies, when tisra was being
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negotiated the cuban government pushed some of the ag groups to push it and the business community said no because cuba has horrible credit and we don't want to be standing in line with everybody else trying to get our money. so i, council president, was able to go around the world and say cuba was the safest export market in the world for u.s. companies, and it is. cuba has never been below 50th out of 223 export markets globally, the united states. that's impressive for a small country on a cash basis. those that are arguing that the embargo needs to be lifted legislatively i think are making a mistake because so much can be done through the executive branch. financing, cuba has been more focusing on re-establishing relationships with existing training partners commercially and politically -- china,
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russia, iran, mexico, spain, brazil. those countries in many cases have government-operated entities. cuba buys rice generally from vietnam. food one and two, which are state-run entities. why do they do that? because vietnam gives them one and two and three years to pay for the rice. when they default very few people know about it and they prefer it that way. so it isn't all about what we want to do down there. it's what they want us to do down there and what they can afford to have us do down there. it was amazing after president obama's remarks, the same -- we saw the same after fidel castro stepped down that people were running to see if they can get on a plane and go down there. they have a long way to go but from our perspective, from the united states' perspective, it'sroriç best to move slowly because
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focusing back on where we were in 1959, when it comes to cuba don't focus on anything five years back because that's basically what your reality is going to be. your reality is going to be changing yearly. so looking way back to evaluate what may be in the future, i don't think we'll spend a lot of time doing that. more importantly is to look at what cuba is and look at it realistically realistically. 11.2 million people with a small economyv] that has horrible credit. the most important from a business perspective announcement that the president made was direct correspondent banking because right now you do have a triangle. cargo sends something to cuba, cubans will use a bank at another country and send it to
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u.s., direct correspondent banking, so that can take a day or two. that money go havana to chicago within several hours. it's more efficient less expensive. but here's the challenge. some years ago that was an idea that the bush administration was considering. council and some of the companies went down to the cubans and said this is something that would certainly be helpful. the cubans said here's our challenge. your government stillnfx change us. we understand that there are the laws and the regulations put into place after 9/11 basically requires any foreign bank that wants to do business with a u.s. bank to open its books to make sure that money laundering, drugs, et cetera terrorism. so the cubans said at that point, how is this beneficial to
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us to open our books to the government that wants basically to put us out of business. so this time around it's going to be interesting to see if the cubans look at this differently or if there are some ways around it. but the direct correspondent banking is very important. i will shut up now and go to questions. >> great. thank you, john. we're going to now move to q and a. we have a microphone that we're going to pass around and ask you to wait for that microphone to arrive to you and then when you pose your question if you could produce yourself your name and your affiliation we would appreciate it and others in the room would appreciate it. if you could keep your questions brief, if you want to direct them to a particular panelist, please do so. if you just want it to be a jump ball for the panel that's fine, too. >> john can i just interject because i feel like i want to
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just make a couple clarifying points here because john mentioned that those that are working in the embargo might be making aamç mistake. just as that context before you ask a question, moving slowly would be quite painful for the cuban people, but not only that, that doesn't provide business the certainty that we need. quite frankly, if we move slowly as americans, we're just tieing one hand behind our back as we see investors landing in cuba from places in the european union, from brazil from other places across the globe. so moving slowly is actually not quite the answer. then i do want to put some context around at least in our conversations with cuban officials what they're thinking. what they see in terms of the u.s. sanctions is that it's actually crippling their ability not only to get as much u.s. fdi. their estimates are that they need about $2 billion a year.
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in our conversations with the trade minister who has been quite forward leaning he's actually indicated that their history is one of having been dependent on one country whether it's the united states whether it's russia and as john mentioned, venezuela. quite frankly they don't want to be dependent on one country which is why they want the sanctions to end. they've estimated it at $2 billion. we've estimated it at $7 billion. i would take issue with the fact that cuba sees venezuela as its most important relationship. quite frankly, cuba sees cuba linking with the globe as its most important relationship. and last, i don't think we should be focusing on what people wore on december 17th but on what people said. the fact that the cuban government engaged with the united states in 18 months of dialogue is the action. when the u.s. business community met with the president in havana
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in may, he wore a business suit. >> thank you, devry. questions? right in the front here. >> good morning. doug from omni capital group. john the war mentality that you described which i agree with i just spent ten days in cuba last week i agree with that sense does that live on beyond raw castro and fidel castro, or does that die when they go?+4q >> i think we would all like?÷"g[ it to pass on as quickly as possible, but there are a lot of generations that have been born under it and know only it. so i think that the process will not be swift, and i don't necessarily think we want it to
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be swift. i don't think we want a yeltsin-style transition that took place through ussr at the beginning. but no one knows. there's a lot of love and hate. cubans have one of the highest awarenesses of u.s. brands in the world and one of the highest preferences for u.s. brands in the world. for u.s. companies launching into cuba comes with less cost than some other market places. that makes it attractive. and that's because the folks do have and the people of cuba, many of them have access. but we saw what no one expected with fidel. most of the modelling done in the u.s. government was fidel is
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speaking speaking, he drops dead or he's in his office and helyk÷ drops dead and people know they don't know, but no one ever expected a succession and then the transition from brother to brother. so i would don't expect that raul dies and it's a switch. it's going to be more of a wave. >> thank you. bill lange? >> good morning. bill lange with caterpillar. first, this is probably about a great program, great timing. particularly the fact that this is two days away from the big anniversary. some of the folks in here may recall that january 16th 1998 17 years ago, that the usa engage coalition officially took the american business community over the line calling for a new policy toward cuba. took out a full-page ad in "the
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wall street journal." since then, there's been sort of a624secada-like policy. so let me just say while it moves slow there's a whole different frame of ren rensference when it comes to cuba. here's my question they have state-engaged during that entire 17-year period. the business community as related to industrial goods and consumer goods have not. you have trade missions planned, i know you have rumors talking commerce department going down in april there's the council of americas meeting or the summit of the americas in panama in april, as well. you know what's planned one thing about when the american business gets excited about market. every other business community
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around the world gets excited by that same market.ñ"sñ'.1cñ so my question is are we going to6h the vigor or are we going to take the secada-type approach and have a different type of policy.u.ykyky[5x& so jake i guess my question is to you and what do you is planned? >> well, thank you, bill.jañ that was a great commercial for i didn't encourage that at all. so that was all on its own.$ q >> i'll send you a copy. >> thank you. yes, i mean, first of all, interests on the business community -- the broader business community as ebbed and flowed on what they think is possible. you saw a huge blip in interest in 2009 after president obama was elected and the chairman was trying to appeal the travel band. at that point, it was like this room here. a lot of interest, a lot of enthusiasm because there was the potential for something significant to happen.. bm :
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we were on the hill a lot. when that came to pass, everyone you know, went into hibernation again. you're seeing the flow right now because of the announcements. so what i think is important is for the regulations to come out for cuba to be re-examined as terrorism for congress to take up this question on the hill. you have that positive going toward that enables businesses to explore. >> and, so, there will be interests. you will see a drum beat of support. we've beenúki talking about
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colleagues in chamber of congress with su port moving forward with the addministration on the hill and in cuba, generally. >> can i say something? a couple of times, it's been said this morning, go slow. i'm not sure what that means. that it seems to be ankf>ñ attempt to contrast legislation lifting the embargoicañ on the hill with regulatory activity. the president, the executive branch can go much further much faster than congress is going to go on lifting the embargo. there is zero possibility the embargo is going to be lifted. it's not going to happen. it's not one of these bills is going to come out of a committee. so, to the extent that i don't -- i feel it's almost an implication being made that those of us who favor regulatory action by the

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